Slovak Republic
- Setting up a joint stock company (a.s.)
- Setting up a limited liability company (s.r.o.)
- Setting up a sole proprietorship
- Basic information
- Bookkeeping and Tax
Setting up a joint stock company – a.s.
The joint stock company is the second most commonly established legal form of business besides the limited liability company in the Slovak Republic. Setting up the joint stock company ”a.s.” is atractive mostly for the medium-sized and multinational companies. The joint stock company is a company that has its share capital divided into a certain number of shares with a nominal value.
Founders
The joint stock company can be established by a founder (deed of foundation), in case the founder is a legal person, or by more founders (articles of association).
Establishment
It is established by the articles of association or the deed of foundation by a notarial deed and by the registration in the Trade Register. The articles of association or deed of foundation includes draft of statutes.
Bodies of the joint stock company
The general assembly, board of directors and board of supervisors.
Share capital
The amount of the share capital is set at least at 25,000 EUR.
Liability
The company is liable for the obligations with all of its assets. The shareholders are not liable for the obligations of the company.
Basic duties
Double-entry bookkeeping, opening of a bank account in the Slovak Republic, filing of tax returns.
Start-up time of the joint stock company
The founding of the joint stock company usually takes 25 working days.
The price for setting up the joint stock company
The price of the service includes:
– verification of the business name
– preparation of the full documentation for the establishment of the joint stock company
– communication with the tax office, trade register, trade licensing office
– payment of fees
– delivery of the original documents to your address
– registration of the company for income tax purposes
– registration of the company for the value added tax (VAT) for an additional cost.
Advantages of the joint stock company
A joint stock company has in comparison with other legal forms of business higher credit and image rating. It is the ideal legal form when doing projects with higher capital intensity. The relative anonymity of shareholders is ensured.
Disadvantages of the joint stock company
Demanding personnel structure. Higher start-up costs. A complicated process of winding up a joint stock company. Payment of the tax license.
Bookkeeping
Each legal person should keep double-entry accounting.
Taxes
Income tax – 22%
Value Added Tax (VAT) – 20%
Fees for municipal waste – according to the number of employees of the company (about 20 EUR/year).
Tax license
The tax license is the so called ”minimum tax”, that the trading companies (s.r.o, a.s.) are obliged to pay. An exemption from payment of the tax license is represented by the newly established companies, which are exempted from the payment for the first calendar year (tax year) from their establishment.
The amount of the tax license
Legal person with a turnover of less than 500,000 €, non VAT payer – 480 €/year.
Legal person with a turnover of less than 500,000 €, VAT payer – 960 €/year.
Legal person with a turnover more than 500,000 € – 2,880 €/year.
- Basic information
- Bookkeeping and Tax
Limited liability company – s.r.o.
Starting a business in the form of a limited liability company – s.r.o., is along with the classical sole proprietorship, the most common and most popular legal form of business in Slovakia. The shareholder of the company is not liable for the company’s obligations exceeding his share in the company and he may sell the company at any time with profit. The company is established by the articles of association or the deed of foundation, in case of a single founder/shareholder by registering in the Trade Register of the Slovak Republic. A shareholder and/or executive director can be also a foreigner without permanent residence in the Slovac Republic. In case he is an executive director of the company without permanent residence in the in the Slovac Republic, the current criminal record from the home country is required.
Founders
The company may be established by one or more physical and legal persons; however, it may have up to 50 shareholders. The company founder can be a foreigner without permanent residence in the Slovak Republic. The founder can also be a legal person – another trading company.
Statutory body
The competences and the number of executive directors is determined by the articles of association or the deed of foundation. The company must have at least one executive director. The current legislation does not determine the maximum number of executive directors of a company. Executive directors can act on behalf of the company independently or collectively.
The statutary body can be
anyone of the shareholders or a person who is not a shareholder of the company. It can be also a foreign national. The executive must have a good reputation (the good reputation is verified by way of an extract from the criminal records) and have legal capacity. The executive director does not need to have any qualification to perform his duties.
Share capital
The amount of the share capital in Slovakia is set at least at 5,000 EUR. Since 01.01.2016, there is no need to prove the share capital in cash, the statement of the deposit administrator is sufficient. In case the company is founded by more shareholders, the minimum contribution of each shareholder must be at least 750 EUR.
Liability
The company is liable for the obligations with all of its assets.
Basic duties
Double-entry bookkeeping, opening of a bank account in the Slovak Republic, filing of tax returns.
Start-up time of the company
Setting up a limited liability company usually takes 25 working days.
The price for setting up a company
The price of the service includes:
- verification of the business name
- preparation of the full documentation for the establishment of the company
- communication with the tax office, trade register, trade licensing office
- payment of fees
- delivery of the original documents to your address
- registration of the company for income tax purposes
- registration of the company for the value added tax (VAT) for an additional fee.
Advantages of the limited liability company
Limited liability, the possibility of selling the share, entry of an investor in the company, a publicly accessible financial statement, single tax rate.
Disadvantages of the limited liability company
A more complicated process of winding up the company. There are many laws and regulations that should be fulfilled by a limited liability company, particularly if it has its own employees. Payment of the tax license.
Bookkeeping
Each legal person should keep double-entry accounting.
Taxes
Income tax – 22%
Value Added Tax (VAT) – 20%
Fees for municipal waste – according to the number of employees of the company (about 20 EUR/year).
Tax license
The tax license is the so called ”minimum tax”, that the trading companies (s.r.o, a.s.) are obliged to pay. An exemption from payment of the tax license is represented by the newly established companies, which are exempted from the payment for the first calendar year (tax year) from their establishment.
The amount of the tax license
Legal person with a turnover of less than 500,000 €, non VAT payer – 480 €/year.
Legal person with a turnover of less than 500,000 €, VAT payer – 960 €/year.
Legal person with a turnover more than 500,000 € – 2,880 €/year.
- Basic information
- Bookkeeping and Tax
Sole proprietorship
The business is conducted by a sole proprietor – physical person. Under the proprietorship, the sole proprietor performs business activities in his own name, on his own responsibility in order to make profit. We can mention for example professions, where one operates independently in the field of administration – accountant, information services – computer programmer, construction – mason etc. Under the sole proprietorship, in the territory of the Slovak Republic business activities may be performed only by a physical person who meets the following requirements – the person completed the age of 18 years, has a good reputation, legal capacity, professional capacity of fulfilling conditions on craftsmanship trade licence or regulated trade licence.
Types of trade licences
We distinguish between three types of trade licences in Slovakia. Free trade licences – for the operation of the trade licence, certain general conditions should be fulfilled (for example: retail, computer services, bookkeeping). Craftsmanship trade licences – the fulfilment of general conditions and also special qualification – gained by education in the particular field – is required (for example: car mechanic). Regulated trade licenses – fulfilment of general conditions and also special qualification – not gained by way of education – shall be necessary (i.e.: translation and interpretation services).
Establishment
The authorization to operate arises on the date of issue of the trade license.
Liability
A sole proprietor as a physical person is responsible for the liabilities with all of his assets.
Basic duties of the sole proprietor
Bookkeeping, opening of a bank account in the Slovak Republic, filing of tax returns and payment of levies.
Start-up time of the sole proprietorship
3 working days.
The price for the setting up of a sole proprietorship
The price of the service includes:
- preparation of the full documentation for the establishment of the sole proprietorship
- communication with the office
- obtainment of the trade license
- payment of fees
- delivery of the original documents to your address.
Advantages of the sole proprietorship
Short start-up time in a few days. In some cases even within hours. Low cost of setting up, just like for the suspension and cancellation of the sole proprietorship. Lower cost of bookkeeping in comparison with other legal forms of business in Slovakia. The sole proprietor does not pay any tax license; however, the high level of contributions shall be taken into consideration.
Contributions
The basic advantage of the novice sole proprietor is the allowance of not paying social insurance for the first year of business. The obligation to pay social insurance arises after filling the first tax return.
For contributions to the health insurance fund, a minimum assessment base is determined in 50% of the average wage achieved two years ago (year: average wage): year 2014 – 858 €, year 2015 – 412 €, year 2016 – 429 €.
The maximum assessment base for the health insurance contribution in case of self-employed persons is determined as five times the average wage achieved two years ago.
For the year of 2015, the maximum assessment base was: 4 120 €
For the year of 2016, the maximum assessment base is: 4 290 €.
Income tax
It equals to 19% of the part of the tax base, which does not exceed 176.8 times the current subsistence level (35,022.31 €) and 25% of the part of the tax base exceeding 176.8 times the current minimum subsistence level.
Czech Republic
- Setting up a joint stock company (a.s.)
- Setting up a limited liability company (s.r.o.)
- Basic information
- Bookkeeping and Tax
Setting up a joint stock company – a.s.
The joint stock company is the second most commonly established legal form of business besides the limited liability company in the Czech Republic. Setting up the joint stock company ”a.s.” is atractive mostly for the medium-sized and multinational companies.The joint stock company is a company, whose share capital is divided into a certain number of shares. The company has after its business name addition “joint company“ or a shortcut “akc. spol.” or “a.s.”. The share capital of the company is 2,000,000 CZK. If you decide to keep accounts in euro, it is possible to have a capital value expressed in EUR. A capital contribution of the company can be monetary and non-monetary. A non-monetary contribution must be appraised by an expert.
Founders
The lowest number of founders is 1 physical person or 1 legal person. The highest number of founders is not limited by the law.
Establishment
The establishing of the joint stock company requires only the acceptance of statutes.
Structure of the joint stock company
The founders of the joint stock company can choose from the dualistic and monistic internal system of the company. When choosing the dualistic system, a board of directors and a supervisory board is established. When choosing the monistic system, there is a statutory director and the management board. The above mentioned bodies may be single person bodies. In case of the monistic system, the sole member of the management board can lead the company and also act as a statutory director. The members of the bodies can be physical and legal persons, and the term of the mandate of the members can be determined according to the needs.
Shares
Shares may take the form of registered shares and bearer shares. Bearer shares can exist only in registered form or as so called immobilized securities. Regarding the type of shares, in addition to ordinary and preferred shares other species can be issued, as well which may refer to various special rights (different determination of the profit share, a different weighting of votes during the general assembly). Such shares must be clearly specified in the statutes. One of the innovations are the shares issued with no par value. Each share participates equally in the share of the company.
Share capital
The amount of the share capital is set at least at 2,000,000 CZK or 80,000 EUR.
Liability
The company is liable for the obligations with all of its assets. The shareholders are not liable for the obligations of the company.
Basic duties
Double-entry bookkeeping, opening of a bank account in the Czech Republic, filing of tax returns. Since 01.01.2014, joint-stock companies have the obligation to set up a website with data that are required to be placed on the commercial documents, financial statements or a general meeting notice.
Start-up time of the joint stock company
The founding of the joint stock company in the Czech Republic usually takes 25 working days.
The price for setting up the joint stock company
The price of the service includes:
- verification of the business name
- preparation of the full documentation for the establishment of the company
- communication with the tax office, trade register, trade licensing office, notary office
- payment of fees
- delivery of the original documents to your address
- registration of the company for income tax purposes
- registration of the company for the value added tax (VAT) for an additional fee.
Advantages of the joint stock company
A joint stock company has in comparison with other legal forms of business higher credit and image rating. It is the ideal legal form when doing projects with higher capital intensity. The relative anonymity of shareholders is ensured.
Disadvantages of the joint stock company
Demanding personnel structure. Higher start-up costs. A complicated process of winding up a joint stock company.
Bookkeeping
Each legal person should keep double-entry accounting.
Taxes
Income tax – 19%
Value Added Tax (VAT) – 21%
- Basic information
- Bookkeeping and Tax
Limited liability company – s.r.o.
A limited liability company is the most popular legal form of business in the Czech Republic. The company is established by the articles of association or the deed of foundation by a notarial deed and by the registration in the Trade Register of the Czech Republic. The shareholder and/or executive director may be also a foreigner without permanent residence in the Czech Republic.
Founders
The company may be established by one or more physical and legal persons; however, it may have up to 50 shareholders.
Statutory body
The competences and the number of executive directors is determined by the articles of association or the deed of foundation. The company must have at least one executive director. Executive directors can act on behalf of the company independently or collectively.
The statutory body can be
one of the shareholders or a person who is not a shareholder of the company, or it can also be a foreign national. The executive director must have a good reputation (the good reputation is verified by way of an extract from the criminal records) and needs to have legal capacity. The executive director does not need to have any qualification to perform his duties.
Share capital
The amount of the share capital is set at least at 1 CZK. The share capital must be paid to the technical bank account, before the application for the registration in the Trade Register is filed. The technical bank account can be set up even under a power of attorney, without the need for personal presence in the Czech Republic.
Liability
The company is liable for the obligations with all of its assets.
Basic duties
Double-entry bookkeeping, opening of a bank account in the Czech Republic, filing of tax returns.
Start-up time of the company
Setting up a limited liability company usually takes 25 working days.
The price for setting up a company
The price of the service includes:
- verification of the business name
- preparation of the full documentation for the establishment of the company
- communication with the tax office, trade register, trade licensing office, notary office
- payment of fees
- delivery of the original documents to your address
- registration of the company for income tax purposes
- registration of the company for the value added tax (VAT) for an additional fee.
Advantages of the limited liability company
Limited liability, the possibility of selling the share, entry of an investor in the company, single tax rate.
Disadvantages of the limited liability company
A more complicated process of winding up the company. There are many laws and regulations that should be fulfilled by a limited liability company, particularly if it has its own employees.
Bookkeeping
Each legal person should keep double-entry accounting.
Taxes
Income tax – 19%
Value Added Tax (VAT) – 21%
Hungary
- Basic information
- Bookkeeping and Tax
Limited liability company – Kft.
A limited liability company is the most popular legal form of business in Hungary. The company is established by the articles of association or the deed of foundation by the registration in the Trade Register of Hungary. The shareholder and/or executive director may be also a foreigner without permanent residence in Hungary.
Founders
The company may be established by one or more physical and legal persons.
Statutory body
The competences and the number of executive directors is determined by the articles of association or the deed of foundation. The company must have at least one executive director. Executive directors can act on behalf of the company independently or collectively.
The statutary body can be
anyone of the shareholders or a person who is not a shareholder of the company. It can be also a foreign national. The company must have at least one executive director. The executive must have a good reputation (the good reputation is verified by way of an extract from the criminal records) and have legal capacity. The executive director does not need to have any qualification to perform his duties.
Share capital
The amount of the share capital in Hungary is set at least at 3,000,000 HUF (approximately 10,000 EUR). The share capital must be paid to the specific bank account, only a statement of the paid up share capital is required.
Liability
The company is liable for the obligations with all of its assets.
Basic duties
Double-entry bookkeeping, opening of a bank account in Hungary, filing of tax returns.
Start-up time of the company
Setting up a limited liability company usually takes 12 working days.
The price for setting up a company
The price of the service includes:
- verification of the business name
- preparation of the full documentation for the establishment of the company
- communication with the trade register
- payment of fees
- delivery of the original documents to your address
- registration of the company for income tax purposes
- registration of the company for the value added tax (VAT) on request.
Advantages of the limited liability company
Limited liability, the possibility of selling the share, entry of an investor in the company, single tax rate. Quick process of company registration for the value added tax, within hours.
Disadvantages of the limited liability company
More complicated process of winding up a company. Stricter control and compliance with the laws of Hungary, in comparison with the Slovak and Czech Republic.
Bookkeeping
Each legal person should keep double-entry accounting.
Taxes
Income tax – 10%, up to a profit level of 500 million forints and 19% in case of exceeding the profit level of 500 million HUF.
Value Added Tax (VAT) – 27%
Dividend tax – 16%, if the owner of the Hungarian company is a foreign physical person.
Dividend tax – 0%, if the owner of the Hungarian company is a foreign legal person.
Local tax – 2%.
The communication with the state institutions is electronical.
Poland
- Basic information
- Bookkeeping and Tax
Limited liability company – Sp. z o.o.
The most popular legal form of business in Poland is the limited liability company, the so called Spółka z ograniczoną odpowiedzialnością, official abbreviation ”Sp. z o.o.“. It is a trading company in which a shareholder is liable for the obligations in the amount of his capital contribution. The founders of the company may be physical and also legal persons. The company should have at least one executive director. The supervisory board and the audit board are voluntary bodies. The share capital needs to be at least 5,000 PLN (approximately 1,164.00 EUR). The full amount of the share capital needs to be paid upon the establishment of the company. It is not required to pay the amount of the share capital to the bank account.
Founders
The company may be established by one or more physical and legal persons.
Statutory body
The competences and the number of executive directors is determined by the articles of association or the deed of foundation. The company must have at least one executive director. Executive directors can act on behalf of the company independently or collectively.
The statutary body can be
anyone of the shareholders or a person who is not a shareholder of the company. It can be also a foreign national. The company must have at least one executive director. The executive must have a good reputation (the good reputation is verified by way of an extract from the criminal records) and have legal capacity. The executive director does not need to have any qualification to perform his duties.
Share capital
The share capital needs to be at least 5,000 PLN (approximately 1,164.00 EUR). The share capital must be paid to the specific bank account, only a statement of the paid up share capital is required.
Liability
The company is liable for the obligations with all of its assets.
Basic duties
Double-entry bookkeeping, opening of a bank account in Poland, filing of tax returns.
Start-up time of the company
Setting up of a ”Sp. z o.o.” company usually takes 3 – 4 weeks.
The price for setting up a company
The price of the service includes:
- verification of the business name
- preparation of the full documentation for the establishment of the company
- communication with the National Court Register
- payment of fees
- delivery of the original documents to your address
- registration of the company for income tax purposes
- registration of the company for the value added tax (VAT) for an additional fee.
Advantages of the limited liability company
Limited liability, the possibility of selling the share, entry of an investor in the company.
Disadvantages of the limited liability company
More complicated process of winding up a company. Stricter control and compliance with the laws of Poland, in comparison with the Slovak and Czech Republic.
Bookkeeping
Each legal person should keep double-entry accounting.
Taxes
Income tax – 19 %.
Value Added Tax (VAT) – 23 %
Singapore
- Basic information
- Bookkeeping and Tax
Definition
A business form which is a legal entity separate and distinct from its shareholders and directors.
Owned by
- Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares.
- Private Company – 50 members or less.
- Public Company – can have more than 50 members.
Legal status
- A separate legal entity from its members and directors.
- Can sue or be sued in its own name.
- Can own property in company’s name.
- Members not personally liable for debts and losses of company.
Registration requirements
- At least one shareholder.
- At least one director ordinarily resident in Singapore.
Paid-up capital
Minimum paid-up capital for registration of a Singapore company is 1 SGD/ recommended at least 1000 SGD. Paid-up capital (also known as share capital) can also be increased after the incorporation of the company.
Formalities and expenses
Certain compulsory formalities and procedures to comply with:
- Must appoint a company director.
- Must appoint a company secretary within 6 months of incorporation.
- Must have a registered address (The registered address must be a physical address (can be either a residential or commercial address) but cannot be a P.O. Box.).
- Must appoint an auditor within 3 months after incorporation unless the company is exempt from audit requirements.
- Annual Returns must be filed.
- Statutory requirements for general meetings, duties of director/company secretary, share allotments, etc.
- Double-entry bookkeeping, tax filing.
Incorporation time
Within 3 working days (after reception of all required documents).
The price for the setting up of a sole proprietorship
The price of the service includes
- Preparation of the full documentation for the establishment of the sole proprietorship.
- Nominee residential director.
- Corporate secretarial services.
- Retainer (one-off security deposit).
- Communication with the office.
- Obtainment of the trade license.
- Payment of fees.
- Delivery of the original documents to your address.
Profits taxed at corporate tax rates.
Singapore registered companies have very attractive tax exemptions and incentives for the first 3 years from incorporation.
| Chargeable income | % exempted from Tax | Amount exempted from Tax |
| First $100,000 | 100% | $100,000 |
| Next $200,000 | 50% | $100,000 |
| Total $300,000 | $200,000 |
Conclusion: company pays less than 5.7 % for the first S$300,000 annual profits and 17% flat after that. There are no capital gains or dividend taxes on Singapore companies.
Corporate Income Tax Rebate for YAs 2013 to 2017
Corporate Income Tax Rebate is given to all companies* to help them deal with rising business costs. The Minister for Finance has announced in Budget 2016 that to help businesses, especially SMEs, to restructure in the midst of the current economic climate, the Corporate Income Tax Rebate for YAs 2016 and 2017 will be raised to 50% of the corporate tax payable, up from the 30% announced in Budget 2015. The rebate will be subject to a cap of $20,000 per YA.
GTS
f the projected annual revenue of your company exceeds SGD 1 million, such company must register for GST. GST tax is also known as Value Added Tax (VAT) or Sales Tax. If company is GST registered, company will need to charge this tax (7%) to clients on the goods and services provided and in turn remit this amount to tax authorities. GST registration is not mandatory if company’s annual turnover does not exceed S$1 million.
